Even if you don’t buy products from Jamieson Wellness (TSX:JWEL), you should still recognize the company’s distinctive green-capped vitamin bottles that you can find in almost any Canadian pharmacy. The Toronto company is a leading manufacturer, distributor, and marketer of natural health products and supplements. Shares of Jamieson have dropped about 17% year to date, and the stock recently moved into negative territory in the year-over-year period. Should you seek to buy the dip? Let’s dive in and find out.
Here’s why investors should seek exposure to this exciting sector
Late last year, I recommended that millennial investors target this stock. Jamieson’s long-term prospects are worth getting excited about.
When Jamison went public in 2017, leadership predicted the company would benefit from aging global demographics. Canadian seniors are expected to make up about one-quarter of the country’s total population by the middle of the next decade. This demographic is health-conscious — even more so in the wake of the COVID-19 pandemic.
The global dietary supplements market was worth an estimated US$155 billion to start 2022, according to research firm MarketsAndMarkets. The firm projects that this sector will deliver a CAGR of 7.3%, to US$220 billion, by 2027. That’s the kind of growth trajectory that should pique investors’ interest.
How does Jamieson Wellness look after its first-quarter results?
Total first-quarter revenue grew 5%, to $103 million. Jamieson Brands revenue rose 9% domestically and 14% on an international basis. That said, revenue declined in the Strategic Partners segment because of order timing and a big spike in revenues in the prior-year period.
Adjusted net earnings climbed 24% from the prior year, to $10.7 million, while adjusted diluted earnings per share jumped 23%, to $0.26.
Gross profit increased $4.1 million year-over-year, to $37.9 million. Moreover, adjusted EBITDA rose 13% to $20.9 million, and adjusted EBITDA margin was 20.2% compared with 18.9% in Q1 2021.
Should you buy Jamieson Wellness stock today?
Back in the summer of 2021, I picked Jamieson Wellness as my top stock for the rest of the year. The interest in natural health products and supplements has been bolstered by the COVID-19 pandemic, which stoked general health fears. Investors should expect to see more focus on the maintenance of good health in the months and years following this massive crisis.
Jamieson Wellness stock currently has a price-to-earnings ratio of 24. That puts this stock in favourable value territory compared with its industry peers. It also recently declared a quarterly dividend of $0.15 per share, which represents a modest 1.8% yield.
Potential Jamieson Wellness investors should be encouraged by its rock-solid Q1 2022 earnings. I’m looking to snatch up this stock myself sometime in the month of May.